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The Government estimates its net position under the Kyoto Protocol's first commitment period will be $291 million in the black.

That is a $79 million improvement on last year's estimate of $212 million and reflects officials' estimates that net emissions in the period (the five years to the end of next year) will better the country's Kyoto target by 22 million tonnes, 11 million more than forecast last year.

But it is offset by a lower carbon price. The latest estimate, contained in the Crown accounts for the year ended June 2011 released yesterday, assumes a price of $13 a tonne, 30 per cent lower than last year's.

In the absence of any treaty for the period beyond the end of next year no liability beyond 2012 is recognised in the Crown's books.

"However, a view about the outcome of negotiations for future periods is intrinsic to the market price of carbon that has been used to measure the position," it said.

New Zealand's gross emissions are estimated to exceed its Kyoto target by 19 per cent for the 2008 to 2012 period. But that is offset by an estimated 89 million tonnes of credits for CO2 removed from the atmosphere by eligible forests over the same period.

So far 14 million tonnes worth of credits have been passed on to forest owners in the emissions trading scheme. Those who accept credits also accept liability for carbon deemed to be emitted when trees are harvested.

The remaining 75 million tonnes still in Crown ownership give rise to a contingent liability put at $1 billion in the latest accounts, down from $1.6 billion last year.

The Crown accounts warn that the measurement of the Kyoto position is by its nature more uncertain than other items in the Government's balance sheet. The moving parts in the estimate include the physical flows, the international price of carbon, the exchange rate with the euro and Government policy.

The final squaring of accounts with other Kyoto Governments for the first, and so far only, commitment period takes place in 2015.